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[CS-3] Global Strategy, G10 members, lower, higher - Coggle Diagram
[CS-3] Global Strategy
MNE Strategies
4 MNE Strategies
Transnational Strategy
high pressure for cost reductions & high pressure for local responsiveness
International Strategy
low pressure for cost reductions & low pressure for local responsiveness
Global-Standardization Strategy
high pressure for cost reductions & low pressure for local responsiveness
Localization Strategy
low pressure for cost reductions & high pressure for local responsiveness
Foreign Market Entry
why
better or lower cost factors
leverage core capabilities
access a larger market
develop new capabilities
modes
licensing
contract
strategic alliance
local partner
R&D
exporting
sale in foreign market
direct :
agent
joint venture
joint owned independent company
wholly-owned subsidiary
establish a 100%owned unit in a foreign country
Brown
acquire fixed asset and reuse
Acquisition
buy a local company and integrate
Geeenfield
build the unit from scratch
Globalization
economic globalization
since 1960s
a share of global GDP has grown from 22% to over 50%
technological factors
communication and rtansportation
air transport cost has fallen nearly 90% since 1940
the cost of telecommunications has dropped dramatically
the cost of sea freight had fallen by 80% since 1940
reduction in trade and investment barriers
World Trade Organization in 1994
growth of MNEs and FDI
MNEs conduct operations in at least two countries
investment in productive activities abroad
international trade and investment flows
cross-border integration of companies into multinational firms
movement of labor across borders
Foreign Market Entry 2
challenges in foreign markets
regulations
trade and investment barriers
different institutions
different culture
currency
animosity and political bias
liability of foreignness
what
it is simply more costly to do business
how
they may have to build entirely new capabilities
how to internationalize
"stages model"
expand within their home market and then expand into nearby or similar markets
preferably use lower-risk entry modes
multinationals expand into distant and dissimilar markets
choose entry mode based on ability to code with liabilities of foreignness
"born global" firms
they are international from a very young age
the factor to success
a combination of local country specific advantages and supportive government policies
the drivers of recent globalization have included significant improvements in communication
Competitive
Intangible assets
Complementarity
Enhance competitiveness through competition
Use diamond model analysis
Consumer purchasing
G10 members
DFLL Lucy
DSEAS Peggy
IBS Bryant
DFLL Eva
DFLL Ethser
DFLL Vivian
lower
higher